ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) on Thursday penalised the National Transmission and Despatch Company – a state-owned entity – for delaying by up to six years a critical transmission project required to evacuate more than 1,500 megawatts of electricity despite acute shortages.
Oddly, former prime minister Nawaz Sharif had inaugurated some of these power plants years ago but their full generation capacity could not be utilised by now despite continuous payment of capacity charges to private investors.
More strangely, the power regulator imposed a notional fine of Rs10 million on the NTDC for project delays estimated to have caused tens of billions of rupees worth of losses to the exchequer and the consumers.
The regulator said it had imposed the fine “on account of undue delay in power evacuation projects ie transmission lines for power plants and development works ie 500kV and 220kV grid stations”. It said the 500kV Rahim Yar Khan grid station was delayed by six years, 220kV Dera Murad Jamali grid stations was delayed by four years and 220kV Ghazi Road Lahore grid station was also delayed by more than one year.
The non-completion of some of these projects led to countrywide power breakdowns over the last few years.
The regulator said it had “taken serious note of abnormal delay in completion of interconnection arrangement for 404MW Uch-II power plant” ie 125 kilometre 220kV Uch-II to Sibi transmission line.
Uch-II is one the cheapest gas-based power plants currently operating on an interim arrangement. The plant was commissioned in April 2014 and it had been underutilised due to incomplete interconnection arrangement.
Similar was the case of 747MW Guddu new power plant, which was commissioned in April 2014 and was still operating on interim arrangement despite lapse of almost four years. Both these power projects — 404MW Uch-II and 747MW Guddu — were inaugurated by former prime minister Nawaz Sharif despite expert warnings that ribbon-cutting of half-baked projects carried unforeseen costs.
Furthermore, as per contract 220kV Mansehra, 220kV Chakdara, 220kV DI Khan and 220kV Nowshera grid stations were required to be completed by December 2016. However, the said grid stations were still not completed. Consequently, certain areas of Khyber Pakhtunkhwa including Mansehra, Hazara, Swat, DI Khan were facing low voltage and power supply constraints.
The work was still ongoing on these grid stations, said the power regulator. Moreover, 220kV Chishtian and 220kV Gujrat grid stations had been completed with a delay of three years and two years respectively. “The delay in projects has not only caused serious technical and financial complications but also resulted in low voltages and extended hours of loadshedding”, it held.
The regulator said being a national grid company within the meaning of Section 18 of the Nepra Act, the NTDC was responsible to operate and provide safe, reliable transmission and interconnection services to power plants. Moreover, the regulator had directed it in September 2015 to expedite work on all delayed projects and ensure their completion as per contractual completion dates.
However, the company failed to fulfil its obligation under the Nepra Act and also failed to comply with directions for the completion of these projects.
The regulator had started proceedings against the NTDC and sought explanations followed by show-cause notices in November 2016 and May 2017. Lengthy proceedings ensued, culminating in a formal hearing on August 29, 2017. The company failed to satisfy the regulator.
“On account of established violations, the Nepra imposed a fine of Rs10 million”, the order reads.
Published in Dawn, February 16th, 2018
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